Commercial General Liability
Insurer Need Not Pay Defense Costs Insured Incurred before It Told Insurer about Underlying Suit, Sixth Circuit Holds
The U.S. Court of Appeals for the Sixth Circuit has affirmed a district court’s decision that an insurer was not obligated to reimburse its insured for defense costs it incurred in an underlying suit prior to its notifying the insurer of the suit. The circuit court rejected the insured’s contention that the insurer had to establish prejudice from the absence of notice and permission, notwithstanding the policy provision that disclaimed any need to show prejudice, declaring that the insured had not cited any “expense-only case” in which public policy prohibited the insurance company from enforcing a contractual provision that reasonably required notice and permission before the insured could charge defense costs to the insurance company. Read More

Commercial General Liability
Asbestos: Massachusetts Appeals Court Finds that “Pro Rata Time-on-the-Risk Allocation” Method Should Be Used
A Massachusetts appellate court has ruled that the pro rata time-on-the-risk allocation method adopted by the Massachusetts Supreme Judicial Court in Boston Gas Co. v. Century Indem. Co., should be applied to determine the extent of indemnity coverage owed by an insurer for alleged asbestos-related injuries. Read More

Commercial Property
8th Circuit: Coinsurance Provision Should be Calculated Based on Type of Claim Filed
The U.S. Court of Appeals for the Eighth Circuit, reversing a district court’s decision in favor of an insurer, has ruled that calculation of an insurance policy’s coinsurance provision depended on the type of claim filed and that where the insured filed a claim for the actual cash value of stolen property, the coinsurance provision should be calculated using actual cash values. Read More

Commercial General Liability
School Board’s Policy Did Not Provide Coverage for Student Allegedly Injured While Being Driven in Private Car to Basketball Tournament
The Supreme Court of Appeals of West Virginia has ruled that a school board’s insurance policy did not provide coverage for injuries allegedly suffered by a student who was in an accident after she left school in a private car to go to a state high school basketball tournament. The Case: After a sophomore at Summers County High School in West Virginia left school in a graduate’s car—apparently without the permission of any school official—to go to the tournament and was injured, her mother sued the board of education and its insurance carrier, National Union Fire Insurance Company. The trial court granted the insurer’s motion for summary judgment, and the case reached the Supreme Court of Appeals of West Virginia.  Read More